What matters

Sorry for the slow rate of posts here recently. Events in the real world recently have reminded me that while we can all nod our heads in agreement at the idea that the things that matter in the end, when we're on our deathbed, are simple ones, like having spent as much time as possible with the people we love, we are ill-equipped as humans to realize that often enough.

Perhaps it's because something like spending as much time as possible with loved ones is so readily available it doesn't feel like a stretch goal. Or perhaps it's only the people who are closest to us who really can drive us crazy and thus we feel the impulse to flee them more than we would acquaintances, who have only the power to bore us.

I've just started Nassim Taleb's Antifragile, and one of the eye-opening charts in his book listed things that are fragile and their corresponding antifragile counterparts. The row that caught my eye was not one about institutions but about human relationships.

In the antifragile column: attraction.

In the fragile column: friendship. 

Friendship is more fragile than attraction. It seems like some deep truth, hard earned. 

The other realization: our scarcest resource as humans is our time, so how we choose to spend our time is the single most important indicator of what matters to us. This is why it should be the thing we dole out most carefully.

Recall James Carville at the end of The War Room, speaking to the volunteers on the Clinton campaign:

There's a simple doctrine: outside of a person's love, the most sacred thing that they can give is their labor. And somehow or another along the way, we tend to forget that. Labor is a very precious thing that you have. Anytime that you can combine labor with love, you've made a good merger.

Relationships with those we love can be harder work than more casual ones, and yet they will pay us back in unanticipated multiples for the rest of our lives.

Here's hoping you're all able to share time with the people you care about most this Independence Day. 

Tesla battery swap

You can swap a new battery into your Tesla Model S in 90 seconds. Here's the proof.  No details yet as to how much they'll charge for a battery swap. It sounds like if you keep the new battery you pay the difference, perhaps charged based on battery age and capacity differences.

I have done one long road trip so far, from San Francisco to Los Angeles and back, and I stopped at all 3 supercharging stations between the two cities in each direction. It added about a two hours to my trip in each direction because the first supercharging station was packed on the way down, and I couldn't find an open station to charge at in Los Angeles before hitting the road on the way home. 

The next time I make the road trip, I hope to try the battery swap, not just to satisfy my curiosity, but to save on time. Since that trip they've also issued a software update for the car that now shows charging stations you've visited and Tesla supercharging stations on the onboard maps. 

As with owning something like an iPhone, it's always fun when the product improves over time.  Usually it's because of software updates, but a battery swap is really a hardware upgrade.

I guess this obviates the need for someone like Mophie to make a $5,000, 250-pound external battery pack for the Tesla.

China: the Jeff Bezos of Industrial Production?

At Forbes, Karl Smith suggests that the global savings glut may be a result of the Chinese government's willingness to invest at a loss at an unprecedented scale, hoping to earn that back way down the road after more of its citizens have urbanized. 

China at some points has had investment rates of in excess of 40% of GDP. For super-geeks this exceeds the Ramsey Rule at a zero discount rate. For non-geeks it means that there is no investment strategy under which this is the profitable thing to do.

Its always hard to tell but on balance I think the Chinese government is aware of this, yet is willing to lose money on its capital investments in order to provide jobs for people moving to the city. This is a smart move if you think cities produce agglomeration effects.

With apologies to the less wonkish, China is using physical capital as a loss leader in order to grow cities that will produce network effects will in turn foster the human capital that really makes a country rich.

In this way China has become like Amazon’s Jeff Bezos, a Destroyer-of-Worlds. You can’t win a physical capital accumulation battle against someone whose plan is to overinvest and lose money on the physical capital.

If the Chinese government will invest so much of its GDP in these types of projects, that takes those investment opportunities out of play.

Earning to give

From "Join Wall Street. Save the World." 

Jason Trigg went into finance because he is after money — as much as he can earn.

The 25-year-old certainly had other career options. An MIT computer science graduate, he could be writing software for the next tech giant. Or he might have gone into academia in computing or applied math or even biology. He could literally be working to cure cancer.

Instead, he goes to work each morning for a high-frequency trading firm. It’s a hedge fund on steroids. He writes software that turns a lot of money into even more money. For his labors, he reaps an uptown salary — and over time his earning potential is unbounded. It’s all part of the plan.

Why this compulsion? It’s not for fast cars or fancy houses. Trigg makes money just to give it away. His logic is simple: The more he makes, the more good he can do.

He’s figured out just how to take measure of his contribution. His outlet of choice is the Against Malaria Foundation, considered one of the world’s most effective charities. It estimates that a $2,500 donation can save one life. A quantitative analyst at Trigg’s hedge fund can earn well more than $100,000 a year. By giving away half of a high finance salary, Trigg says, he can save many more lives than he could on an academic’s salary.

Fascinating article.

Among other tidbits of note: GiveWell, which analyzes charities for actual effectiveness in changing lives with each of your donated dollars, rates Against Malaria Foundation as the single most worthy charity. Their second ranked charity is GiveDirectly, which essentially just transfers your donation to a poor household in Kenya. They have only 2 employees and 8% overhead.

As for Peter Singer, he is fully supportive of earning to give. 

And [Singer] embraces earning-to-give as among the most ethical career choices one can make, more moral than his own, even. “There is a relatively small group of philosophers who actually have a big influence,” he says from his home in Australia. “But otherwise, the marginal difference that you’re going to make as a professor of philosophy compared to somebody else is not all that great.”

Some further discussion of this article here. 

Sony without electronics?

Sony, it is suggested, might be better off just selling insurance.

Or just making movies and music. But not electronics.

A new report from the investment banking firm Jefferies delivered a harsh assessment of Sony’s electronics business. “Electronics is its Achilles’ heel and, in our view, it is worth zero,” wrote Atul Goyal, consumer technology analyst for Jefferies, in the report, released this week.

“In our view, it needs to exit most electronics markets.”

 Ouch. As a kid who grew up jogging with a Walkman clutched in one hand (later a Discman, later a Sony Minidisc player) it's very strange to imagine Sony ever exiting the electronics business. Of all the Asian countries, Japan is the one I would've expected to make the leap to this new age most successfully given their strong design history. And of their companies, it would have been Sony I would have put in the pole position.

But it turned out to be China and Korea who have surged ahead, the spark coming from their ability to manufacture devices cheaply at scale. In particular, Korea, most notably Samsung, have accumulated market share at an astonishing rate.

Among strange things I did not know which I learned from this article: Sony's most financially lucrative business over the last decade (measured by operating profit) is selling insurance.

One problem for Sony is that electronics is a bloody war in which margins are low and moats are difficult to build. Their best chance, perhaps, was to shift from a pure hardware sales model to an ecosystem in which Sony's music label and movie studio interacted with Sony's hardware to become some type of closed network. 

Thankfully for consumers, perhaps, Sony's media or "software" groups never walled off their content that way. That those divisions are all housed under the same roof really doesn't seem to be benefiting Sony much.